Sometimes, after I've done a broadcast of my Lykken on Lending radio show, written article for an industry publication, or conducted an interview for one of the major news networks, I'll receive some push back on my views. Some members of the audience will disagree with me and, sometimes, they'll be extremely aggressive in their disagreements. When I receive the feedback, I get the impression that these dissenters expect me to dig in my heels and defend my position.
As you become more of a leader in the mortgage industry, you will increasingly face the temptation to lose touch with what's going on in the frontlines. When you're at the top level, doing interviews with trade publications, attending conferences, and chatting about the workings of the industry from a higher level, you can lose sight of what's going on with your employees and consumers. Don't get me wrong ... I believe all of these things—industry news, conferences, etc.—are important to becoming a stronger leader. But, you've also got to pay attention to what's going on at the ground level.
The FHFA has released a new set of financial rules for borrowing in the industry. Last week, I had the privilege of interviewing my friend and business partner Andy Schell to discuss the rulings. According to Andy, it appears that the main thrust of the ruling has to do with an organization's capital ratio--it's tangible net worth divided by it's total assets. According to the new guidelines, this ratio must be greater than six percent.
As of right now, this ruling is from the FHFA, so it only has to do with Fannie and Freddie. So, if that doesn't pertain to you, you might be asking, "What does this have to do with me?" Do you really need to pay attention to what's going on with regulations that aren't relevant to your particular aspect of the industry? Yes, I think you probably should.
As anj industry, we often look at Washington as the enemy. We are quick to judge the regulators as unnecessarily impeding the industry and ultimately hurting the consumers through arbitrary restrictions. And, don't get me wrong, I believe we should continue to fight for more freedom from government intervention. But I also think we need to be open to the possibility that some regulations could help steer the industry in a better direction.
As the host of Lykken on Lending, a weekly radio show I broadcast, I get the opportunity to discuss various aspects of the mortgage industry with some very smart folks. These leaders in various segments—such as technology, the economy, and the regulatory environment—are able to take the complex issues that surround our industry and distill it into simple, digestible pieces of information.
The principal limit factor (PLF) condition in the Mortgagee Optional Election (MOE) Assignment is a relief-killer condition.
That is why calling the MOE Assignment “a relief” for existing surviving HECM non-borrowing spouses, caught in HUD-created foreclosures-and-displacements crisis, is disingenuous. That was why, in our last post, we called it a “cruel bureaucratic farce.” And that is why it should be scrapped so that an HUD-identified automatic relief process for the injured parties (existing surviving HECM non-borrowing spouses and their borrowing spouses’ lenders) can take hold.
From the original five MOE eligibility conditions in court papers to the eight conditions in Mortgagee Letter 2015-03, the PLF condition stands out as a solution-wrecker. Let’s look at what it says and what it means in light of HECM’s structure.
More and more, it seems like we are living in a culture of blame. It gets easier and easier the play the victim in our lives. It's not our fault. It's the way we were raised. It's our genetics. It's our socioeconomic status. It's the market. It's this. It's that. It's anything but us. As a society, it has become acceptable to offer excuses for our failures. We are all victims, and none of us are to blame for anything.
Harry S. Truman once said, "It is amazing what you can accomplish if you do not care who gets the credit."
Patience is a virtue. I'm not sure exactly where it comes from, but we've probably all heard this adage. It usually comes to mind when we're stuck in traffic or waiting in line at the grocery store. Surely, developing patience can benefit us in our personal lives. But I think patience is an attribute that can have profound effects on business life as well.
When you are patience with your work, you don't tend to make hasty decisions. Following the completion of a task, you allow time for results to occur before doing something else. In being productive, patience can be the perfect counterbalance to initiative. Of course, you want to be proactive. But, if you move to fast, you may change things before they have a chance to work.
Mortgagee Letter 2015-03 is a cruel bureaucratic farce.
Sold by HUD as displacement relief for existing and future widowed spouses of reverse mortgage borrowers, it will actually do the opposite by design. Few if any widowed spouses will be able to meet its conditions, and their dead spouses’ lenders will be forced to pursue illegal foreclosures to recover their investments. The result will be foreclosures and displacements of spouses who are protected under federal law against such action.
In my Lykken on Lending broadcast, my co-hosts and I frequently get into discussions about the political economy. We talk about topics such as foreign currency, new regimes that are rising and falling, trade agreements, and so on. I like to think that the content of my broadcast is most relevant for loan originators on the front lines of the industry. Is that the case? Do global politics really matter all that much?